Research says drink tax unwise

As time for the final vote on the 2008 county budget draws near, protesters against the… As time for the final vote on the 2008 county budget draws near, protesters against the proposed alcohol tax are hoping new research will help their case.

CONSAD research corporation, a Pittsburgh-based company that performs policy analysis on economic issues, found that the proposed 10 percent tax on poured beverages will reduce average restaurant profit by 10 to 25 percent, will result in at least $18.8 million in annual lost profits and will reduce poured beverage sales 3 percent for beer and 7 percent for wine and spirits.

Friends Against Counterproductive Taxation members Kevin Joyce and Tom Baron joined Frederick Rueter, vice president of CONSAD, yesterday in the county council building to present the research.

Council will meet Tuesday to discuss the budget proposed by county Chief Executive Dan Onorato, which currently includes the alcohol tax and a $2 per day tax on rental cars to help the Port Authority.

“The results speak for themselves,” Joyce, owner of The Carlton restaurant downtown and chair of the Pennsylvania restaurant association, said. “We hope that this study at least affects one or two council members and at least makes them slow down and makes them realize the real repercussions from a 10 percent drink tax.”

Joyce also stressed the fact that this isn’t about the owners, it’s about the new restaurants trying to make it in an industry that’s undergone a tough year with rising oil prices and servers who will be seeing less tip money and possibly higher health insurance costs because business owners will not be making as much money.

He also stressed that this tax will probably cause new restaurants and possibly existing restaurants to move across the county line.

“If you can save thousands of dollars by moving a few miles you’re going to do it,” Joyce said.

Baron, who’s Big Burrito restaurant group owns Mad Mex in South Oakland, added his own sentiments.

“What I found just so remarkable is that this tax was thrown out there as a solution to the county’s fiscal [problems],” he said.

“But there was never any thought as to how that would affect our industry which employs over 30,000 people in the county. When you increase prices, you reduce demand.”

The research summary also states that given the time constraints before council will vote on the budget, CONSAD’s report is only preliminary.

Baron said in a press release that, with the budget approval deadline so close at hand, he found it “hard to believe” that this is the first study that has been done since the state legislature approved the alcohol tax proposal in July.